Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2022, for $300,000. On December 12,

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Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2022, for $300,000. On December 12, 2022, Mahan purchases an additional 750 shares of Bluebird stock for $210,000. According to market quotations, Bluebird stock is selling for $285 per share on December 31, 2022. Mahan sells 500 shares of Bluebird stock on March 1, 2023, for $162,500.

a. What is the adjusted basis of Mahan’s Bluebird stock on December 31, 2022? 

b. What is Mahan’s recognized gain or loss from the sale of Bluebird stock on March 1, 2023, assuming that the shares sold are from the shares purchased on December 12, 2022? 

c. What is Mahan’s recognized gain or loss from the sale of Bluebird stock on March 1, 2023, assuming that Mahan cannot adequately identify the shares sold?  

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South Western Federal Taxation 2023 Essentials Of Taxation Individuals And Business Entities

ISBN: 9780357720103

26th Edition

Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young

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